The Asian Development Bank (ADB) has expanded the Trade Finance Programme (TFP) to support the private sector in Bangladesh by raising its financing limit to $755 million from $518 million at the end of last year.
The TFP works with 12 partner banks in Bangladesh to mobilise private sector capital and fill market gaps by providing guarantees and loans to support trade, according to an ADB press release.
Country Director Manmohan Parkash said, "Given the impact of Covid-19 on the economy – particularly availability of credit for the private sector in Bangladesh – enhancement of the TFP will increase liquidity, help boost businesses, raise exports and imports, increase jobs, plus contribute to economic growth and development."
Noting Bangladesh is one of the most active TFP countries, he said, "The programme has so far supported $814.6 million in trade, with 70.7 percent co-financing by the private sector and over 1,367 transactions, as of 31 December 2019."
As trade transactions typically start and end within 180 days, the $755 million can bankroll and support over $1 billion in Bangladesh trade year-over-year.
A substantial portion of TFP's portfolio supports small and medium-sized enterprises (SMEs) and the expanded coverage of the very active programme will result in enhanced inclusive support to traders, including women, in Bangladesh, Parkash added.
The TFP works with over 240 banks in 21 countries to provide companies with the financial support they need to engage in import and export activities in Asia's most challenging markets.
In 2019, the TFP supported 4,832 transactions worth a total of $5.4 billion, including $3.5 billion in co-financing, and helped 4,069 small and medium-sized enterprises.
Backed by the ADB's AAA credit rating, the TFP supports trade, enabling more companies throughout Asia and the Pacific to engage in import and export activities.
Since 2009, ADB's TFP has supported around 20,000 SMEs across developing Asia – through over 26,000 transactions valued at over $41 billion – in sectors ranging from commodities and capital goods to medical supplies and consumer goods.
ADB, Jica to strengthen collaboration to help Asia in fight against Covid-19
The ADB and Japan International Cooperation Agency (Jica) will strengthen collaboration to assist ADB's developing member countries (DMCs) in their response to the Covid-19 pandemic.
ADB President Masatsugu Asakawa and Jica President Shinichi Kitaoka reaffirmed their commitment on Tuesday.
On their call, the two presidents discussed the economic and social status of Asian and Pacific economies in the wake of the pandemic and their organisations' respective assistance packages.
Masatsugu Asakawa said the ADB and Jica have a long history of collaboration and partnership in several key areas – including supporting DMCs – to accelerate progress toward achieving universal health coverage and co-financing on quality infrastructure.
"Covid-19 poses serious health, social, and economic threats to the region. It is important that we find ways to enhance our collaboration, including co-financing, to help developing member countries address the pandemic," he added.
The ADB announced a $20 billion assistance package on 13 April to address the needs of its DMCs as they respond to the Covid-19 pandemic.
The package includes $13 billion for quick and affordable budget support to help DMCs counter the severe macroeconomic impacts arising from the pandemic with countercyclical expenditure with the focus on the poor and the vulnerable.
Some $2.5 billion of the package is available as concessional and grant resources and about $2 billion is earmarked for loans and guarantees to the private sector to rejuvenate trade and supply chains.
The ADB will expand its technical assistance to DMCs in designing, improving, implementing, and monitoring health and other sector actions against Covid-19.
Jica is preparing a Covid-19 crisis response emergency support loan programme to strengthen countries' capacity to respond to Covid-19 and revitalise economic activities in those hit hard by the pandemic.
Its assistance will be provided as standalone loans or co-financing with multilateral development banks, including the ADB.